Silvaco v. Intel, Trade Secrets, Cal, Ct. Appeals 2010

Filed 4/29/10

CERTIFIED FOR PUBLICATION

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIASIXTH APPELLATE DISTRICTSILVACO DATA SYSTEMS,Plaintiff and Appellant,v.INTEL CORPORATION,Defendant and Respondent.H032895(Santa Clara CountySuper. Ct. No. CV031946)Plaintiff Silvaco Data Systems (Silvaco) brought this action against defendantIntel Corporation (Intel) alleging that the latter had misappropriated certain trade secretsused by Silvaco in its software products. The primary gist of the claims was that Intelhad used software acquired from another software concern with knowledge that Silvacohad accused that concern of incorporating source code, stolen from Silvaco, in its products. The chief question presented is whether Intel could be liable for such use if, aswas effectively undisputed, it never possessed or had access to the source code but onlyhad executable, machine-readable code compiled by its supplier from source code. Weanswer that question in the negative. One does not, by executing machine-readablesoftware, “use” the underlying source code; nor does one acquire the requisite knowledgeof any trade secrets embodied in that code. We also join the trial court in concluding thatSilvaco failed to plead a viable claim not based upon a misappropriation of trade secrets.Accordingly, we will affirm the judgment.

B

ACKGROUND

Silvaco develops and markets computer applications for the electronic designautomation (EDA) field, which covers the entire complex process of designing electroniccircuits and systems. Among the various sub-categories of EDA software are circuitsimulators, which permit the designer to create a virtual model of a proposed circuit inorder to test its properties before incurring the expense and delay of manufacturing aworking prototype. Defendant Intel, a major developer and manufacturer of integratedcircuits, is a user and purchaser of EDA software, including circuit simulators. Accordingto Silvaco’s complaint, Intel has also developed some EDA software for its own use.Among Silvaco’s software products is SmartSpice, an analog circuit emulator. InDecember 2000, Silvaco filed a suit against Circuit Semantics, Inc. (CSI), a competingdeveloper of EDA software, alleging that CSI, aided by two former Silvaco employees,had misappropriated trade secrets used in SmartSpice, and had incorporated them in itsown product, DynaSpice. Silvaco eventually secured a judgment against CSI, includingan injunction against the continued use of “technology” described in an exhibit attachedto the judgment. It then brought actions against several purchasers of CSI software,including Intel.

1

It alleged that

by using CSI’s software

, these end users hadmisappropriated the Silvaco trade secrets assertedly incorporated in that software.Silvaco charged Intel with misappropriation of trade secrets under the California UniformTrade Secrets Act, Civil Code sections 3426 through 3426.11 (CUTSA), as well as withconversion, conspiracy, and violations of the unfair competition law, Business andProfessions Code sections 17200 et sequitur (UCL).

1



One of these matters was previously before this court on an issue concerning thecorrect application of the statute of limitations. (

Cypress Semiconductor Corp. v.Superior Court

(2008) 163 Cal.App.4th 575.) At least two others are pending. (

Silvaco Data Systems v. Cirrus Logic, Inc.

, No. H032802;

Silvaco Data Systems v. Agilent Technologies, Inc.

, No. H032835.)2

Intel generally demurred to all causes of action. A series of challenges andamendments followed, culminating in the sustaining of demurrers to all of Silvaco’s non-CUTSA causes of action on the ground, among others, that they were “preempted” byCUTSA.

2

Intel then moved for summary judgment on the CUTSA claim, arguing that(1) CUTSA defines “misappropriation” in a way requiring the plaintiff to show that the

2



Although this case was decided largely on the pleadings, it has somehowgenerated an appendix over 8000 pages in length. Seldom have so many trees died for solittle. We see three causes for this wretched excess. The first is the inclusion of hundredsof pages of printouts of legal authorities retrieved from online sources. The rules requirethat, for the convenience of trial judges, some such materials be “lodged” in the superior court when cited. (Cal. Rules of Court, rule 3.1113(i).) There is no requirement that they be included in the record on appeal, and ordinarily they have no place in it. (See Cal.Rules of Court, rule 8.124(b)(3)(A) [appendix not to include materials “unnecessary for proper consideration of the issues”].) This court can more easily retrieve authoritiesthrough its own resources than it can find them—or anything else—in an 8000-pageappendix.A second cause of overkill is that each of the appendix’s 27 volumes includes anindex to the entire appendix. This would be a welcome convenience if not for the factthat the index is

103 pages long

—a bulk that, replicated 27 times, consumes more thanone-third of the appendix. This remarkable feat is achieved by listing not only everydistinct

filing

(see Cal. Rules of Court, rules 8.144(b)(1), 8.124(d)(1), 8.122), but every

exhibit or attachment

to each filing. We are thus called upon to thumb through page after page of references to exhibit titles, including lodged authorities (see preceding paragraph). This level of detail exceeds the requirements of the rules, and when itenlarges the index to the present extent, largely defeats the index’s purpose.The third source of unnecessary length is the duplicative inclusion of multiplecopies of documents that were filed repeatedly in the superior court. We assume theseduplicate filing were intended as a convenience to the trial court, but when they inflate arecord to the present proportions they are hardly a convenience to us.There are of course cases in which records this size, and many times this size, areunavoidable. But as the sheer size of the record increases, it become increasinglyimportant for appellate counsel to take an active role in ensuring that the record is nolarger, and no less easily navigated, than accuracy and necessity dictate. The present caseappears to be one of those rare instances when, contrary to the maxim, superfluity

does

vitiate. (See Civ. Code, § 3537.)3